How (and when) a Textbook Pattern Came to Life: See the Euro-Yen Move for Yourself
by Robert Folsom
Updated: June 08, 2020
Welcome to Chart of the Day. I'm Robert Folsom.
How (and when) a Textbook Pattern Came to Life: See the euro-Yen Move for Yourself
Here we have the euro-yen, one of the major non-dollar currency pairs in the FX market. Our timeline is 2020, thru June 5th.
Note this May 6th low near 114.40; we'll discuss the relevant price action preceding the turn, then the large move higher starting in May which has carried into June.
On May 18th -- eight trading days after the low -- the euro-Yen saw a spike higher. That one-day move confirmed a larger Elliott Wave pattern that our currency analyst Michael Madden had been following: specifically, an ending diagonal.
This idealized graph is from Robert Prechter's Elliott Wave Principle, which says the pattern is called an ending diagonal since it anticipates an important change in direction, namely a thrust higher.
Back to our real time example: We noted that the trend in this market thru May 6th had been bearish; yet the action that followed soon indicated that a large thrust higher was about to unfold.
So, on May 18th analyst Michael Madden showed Currency Pro Services subscribers a version of this chart, complete with the diagonal pattern, the 5-wave move into the low at multiple degrees of trend, and a clear directional arrow.
His commentary that day said,
"This is a very bullish outlook... we could see further aggressive price action as EURJPY stages a full retracement of that 5-wave pattern [from the high at 122.87]."
The thrust higher that followed speaks for itself.
This is where I say that not all of our forecasts work out this way -- Currency Pro Services subscribers were alerted to this move in time to be ready.
Michael Madden can teach you the method he used to forecast this market, and show you how to build a successful trading plan around it. Enrollment for his new trading course is open now. Please see below for more information.
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(not what everyone already sees)
The EURJPY chart and forecast speak for themselves. Our subscribers were READY for this cross-rate to explode higher.
What's more: The forecast you just saw in action would only come from EWI. We've been in the pattern-recognition business for decades -- if YOU want to learn the method Michael Madden used to forecast the EURJPY, sign up for his new trading course today. Follow the link below for more.